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BMW will most likely be using a motorcycle engine as a range entender in the upcoming i3.
In a recent conversation with Eric Evarts of Consumer Reports, BMW chief engineer Ulli Kranz hinted at a possible source for the upcoming i3's range extender. After Evarts suggested that a BMW motorcycle engine might be well-suited to duty in the small plug-in, Kranz quickly agreed, apparently excited that someone understood his line of thinking. This could, theoretically, make for an extremely efficient vehicle, albeit not a particularly powerful one.
At the moment, the most buzz is focused around the 652-cc, 48hp engine in the G 650 GS motorcycle. Production of this engine was recently moved back to Germany from China, and it just might be that this was done in anticipation of an increased volume from i3 demands. With such a small engine, the i3 would essentially be a range-extended city car. This means it would most likely compete with the Toyota Prius plug-in, rather than the Chevy Volt, which has much more range and power (and cost), and is therefore not really in direct competition.